Woolworths firms on shareholder bonanza from fuel sale

Woolworths has given a firm indication that shareholders should expect a fat payout after the sale of its petrol station to the British giant EG Group for $1.72 billion.

The comments came as the company was battered on Wednesday over its status as Australia's biggest poker machines owner and its efforts to address workplace exploitation, at an annual general meeting tempered by shareholders' ringing endorsement of its financial performance.

Woolworths, which announced the sale of its 540 service stations to British company EG Group earlier this month, first agreed to sell the business to BP two years ago at a time when it needed desperately to refurbish stores and drop prices to claw market share lost to Coles.

The company's chairman Gordon Cairns said Woolworths had $2.3 billion of franking credits it wanted to offload, and would be looking at returning the sale proceeds to shareholders.

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"We’ve spent a considerable amount of money on our capex program, and in fact we’ve gone through a period of catch-up, and as we move forward we’d like to see that come back to more normalised level," he said.

"So maybe the time now is to reward shareholders.”

No firm decision would be made until Woolworths had received the proceeds, Mr Cairns said, with the sale pending Foreign Investment Review Board approval.

At its AGM in Sydney, Mr Cairns defended the actions Woolworths was taking to address the widely reported exploitation of migrant workers on Australian fruit and vegetable farms, including its own suppliers.

A resolution on the issue was put forward by the Australian Centre for Corporate Responsibility and co-filed by LUCRF Super that called on Woolworths to involve the National Union of Workers in its suppliers' workplace rights education and grievance resolution procedures.

Mr Cairns said that while Woolworths was taking steps to ensure suppliers adhered to its labour standards, it was not right for the supermarket to "mandate" union involvement in their workplaces.

The resolution received 14.9 per cent votes in favour, based on proxy votes cast before the meeting after gaining the support of several major investors.

"This is a journey we're committed to, and this is a journey we're very happy to involve the NUW. Between us we should eradicate what you've had to go through," he said.

Asked by Tony Moore from the Alliance for Gambling Reform to follow Crown Resorts and disclose the full extent of losses from its 12,000 poker machines, Mr Cairns said that its ALH hotels joint venture accounted for only 3 per cent of Woolworths' gross revenue, making further “disaggregation” not helpful or necessary.

“It’s better having the pokie machines owned by a responsible custodian like Woolworths, which is committed to harm minimisation, rather than giving it to the cowboys - that will only increase harm,” he said.

“My commitment to you is not that we should exit pokie machines, but that we should continue to improve our standards.”

Woolworths' executive and director pay packets and share allocations were voted up with 95.5 per cent shareholder approval, and Mr Cairns we re-elected as chairman with 97.6 per cent approval.

Woolworths suffered its worst period of sales growth in two years in the three months to September, as checkouts were disrupted by the removal of free plastic bags, which Coles was giving away for free, along with its rival's successful Coles' Little Shop toy giveaway.

But the supermarket said those customers were coming back, while launching its own Christmas-themed collectables promotion it hopes will mirror Coles' success.

Chief executive Brad Banducci said falling petrol prices boded well for discretionary consumer spending heading into Christmas, but also warned spending could be hit by any further tightening in bank lending stemming from the royal commission.